As mentioned in my Outlook for November 2014 post, I have been contemplating cancelling my DRIP. There are advantages and disadvantages to owning a DRIP program and I have discussed the details in the post To DRIP or Not To DRIP. But I have come to the conclusion that the benefits do not outweigh the drawbacks anymore, hence the move.
Cancelling My DRIP
For the last couple of years, I have owned a DRIP plan for investing in Bank of Nova Scotia (BNS). While the benefits existed when I started the DRIP program, the biggest pull for me was the discount rate. BNS was offering a 2% discount for the dividend reinvestment, which was cancelled in March 2014. Considering that I still have plenty of room in my tax sheltered accounts to take advantage of and avoid paying the tax man, I have decided to move my BNS shares over to my discount broker and take a tax shelter. All the rest of my holdings are already in tax-sheltered accounts and once the BNS DRIP is moved, I will not be paying a single penny in withholding dividend taxes (or capital gains taxes).
Bank of Nova Scotia (BNS) is still a great long term investment and is currently 15% undervalued to fair price. Read my stock analysis here.
If you are unfamiliar with DRIPs, the website DRIP Primer is one of the best resources available.